Oil boosts Argentine stocks, dollar sale aids peso

Redacción de Reuters

3 MIN. DE LECTURA

BUENOS AIRES, Feb 20 (Reuters) - Record oil prices pushed Argentine stocks to a two-week high on Wednesday and the peso strengthened after a surprise sale of dollars by the central bank, which normally buys dollars to stop the peso rising.

Government debt prices fell 0.7 percent on average in local trade, led by a 2.3 percent slump in dollar-denominated Par bonds in over-the-counter trade. Institutional investors were selling Argentine debt as expectations for further aggressive U.S. interest rate cuts faded.

The peso closed up 0.08 percent at 3.1500/3.1525 per dollar ARS=RASL after the central bank injected dollars to counteract demand for foreign currency from Argentines who fear a U.S. recession and inflationary pressures in Argentina.

The U.S. dollar is the traditional refuge for Argentines fearing economic volatility and remains so despite its weakness compared with other major world currencies.

“The fall of the dollar was because of the Central (bank), and it left prices at the very bottom of estimates by market players, who were disoriented since they didn’t expect the intervention,” said Fernando Izzo, analyst with ABC Mercado de Cambios in Buenos Aires.

However, in informal trade between foreign exchange houses, as measured by Reuters, the peso weakened 0.24 percent to close at 3.1800/3.1825 per dollar ARSB=. The central bank does not operate directly in the informal market. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Fiona Ortiz; Editing by James Dalgleish)